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EU Retaliations Could Cost US Apparel Exporters up to 50 Percent in Tariffs Starting This Week

The European Union has officially put its retaliatory tariff measures against the U.S. in place, and apparel companies shipping product into the region could start paying tariffs reaching 50 percent as soon as Friday.

In a statement Wednesday, the European Commission said it has targeted a list of American products worth 2.8 billion euro ($3.25 billion), and those products will now face an extra duty at the EU border.

The tariffs come in response to the U.S. tariffs on steel and aluminum, and what happens from here is dependent on President Trump’s next move and whether he takes steps to quell the trade war he initiated.

“We did not want to be in this position,” EU commissioner for trade Cecilia Malmström said in a statement. “However, the unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice. The rules of international trade, which we have developed over the years hand in hand with our American partners, cannot be violated without a reaction from our side. Our response is measured, proportionate and fully in line with WTO rules. Needless to say, if the US removes its tariffs, our measures will also be removed.”

The list of goods to face tariffs will certainly have an impact on the apparel industry.

T-shirts, both cotton and of man-made fibers, will face 25 percent tariffs, cotton denim trousers and shorts across all categories will face 25 percent tariffs, and in home textiles, cotton bed linen will be subject to the additional 25 percent duty, as will tablecloths. Some items, like men’s and boy’s work pants, women’s and girl’s cotton overalls, and men’s and boy’s shirts made from man-made fibers, will face tariffs of 50 percent.

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For footwear, there’s a 25 percent tariff on men’s and women’s shoes with leather soles and uppers, sports footwear with rubber or plastic outer soles and uppers, and slippers and other indoor footwear made from rubber or plastic.

In total, there are roughly 50 tariff lines tied to the apparel and footwear industry that will face new tariffs.

The EU said it is seeking to rebalance bilateral trade with the U.S. using the 6.4 billion euro ($7.4 billion) worth of its steel and aluminum exports affected by the U.S. tariffs.

“Of this amount, the EU will rebalance on €2.8 billion worth of exports immediately. The remaining rebalancing on trade valued at €3.6 billion [$4.18 billion] will take place at a later stage—in three years’ time or after a positive finding in WTO dispute settlement if that should come sooner,” the Commission noted. “The EU rebalancing measures will be effective for as long as the U.S. measures are in place, in line with the WTO Safeguards Agreement and EU legislation.”